Is That Deductible? Navigating Software Development in Building ChatRx

Embarking on the exciting and ambitious journey of developing ChatRx, my cutting-edge telemedicine platform, has been an exhilarating adventure filled with both formidable challenges and tremendous rewards.

Embarking on the exciting and ambitious journey of developing ChatRx, my cutting-edge telemedicine platform, has been an exhilarating adventure filled with both formidable challenges and tremendous rewards.

As a physician who also possesses a rich background in pharmacy, I was driven by a powerful vision: to create a system that truly empowers patients by offering them affordable medication options for treating their acute infections while ensuring seamless prescription fulfillment.

This vision set me on a path to incorporate functionalities in my software as a medical device that powers ChatRx, similar to those found in "GoodRx". This would enable users to effortlessly identify the most cost-effective antimicrobial treatments available at their local pharmacies. The integration of such functionalities has not been without its unique technical challenges. One of the most significant hurdles I faced was harmonizing diverse drug coding systems, which required innovative solutions and considerable collaboration among my development team.

Despite these obstacles, my commitment to my AI powered direct to consumer product has never wavered as I persevered through each hurdle with creativity and determination. In this post, I am thrilled to share insights into the ingenious solutions we devised for optimizing our medication fulfillment process. Additionally, I will explore which expenses associated with this process are deductible—a crucial aspect for any business striving for financial efficiency. Join me as we unravel the intricacies of my journey and celebrate the milestones achieved along the way!

I also have some exciting news! For those who've been asking, you can now join our ChatRx waitlist on our website! In a matter of weeks, you can explore the free symptom checker that will be available nationwide. Plus, once we launch into the marketplace at end of March, I will be thrilled to offer the medication treatment option for qualifying conditions (there are nearly 40 of them) for consumers located in Indiana, Illinois, and Michigan. Later this year, as we fine-tune our product, we’ll methodically expand across the country. Stay tuned for more updates!

Bridging the Gap Between NDC and RXCUI Codes

Now let’s talk about unique problem I was facing with my software development.

In the realm of pharmaceuticals, two primary coding systems are utilized:

1. National Drug Code (NDC): This 10 or 11-digit identifier specifies a drug's manufacturer, strength, dosage form, and packaging. It's primarily used for inventory management and insurance billing within pharmacies. This is very specific to the medication, dosing, manufacturer, and package size.

   For instance, the National Drug Code (NDC) assigned to the generic manufacturer Teva for Amoxicillin 500mg varies between their bottle containing 30 capsules and their bottle with 100 capsules in it. Additionally, the NDC for AS Medical Solutions' Amoxicillin 500mg bottle with 30 capsules is distinct as well. The NDC is exceedingly precise, akin to the "Dispense As Written" section on a prescription.

2. RxNorm Concept Unique Identifier (RXCUI): Managed by the National Library of Medicine, RXCUI provides a standardized identifier for medication concepts, independent of manufacturer or packaging details. It's essential for ensuring compatibility across various healthcare systems, especially in e-prescribing. This allows the pharmacist to select an appropriate NDC medication from available stock to fulfill the script.

   For instance, this scenario is akin to informing the pharmacist of the specific generic product desired, allowing them the discretion to substitute it with whatever equivalent they have available in stock to fulfill the prescription requirements.

Our challenge arose when integrating two distinct APIs:

• Medication Pricing API: Designed to fetch the most affordable medication prices, this API utilizes specific NDC codes to identify drugs. Specifics do matter when comparing product prices between manufacturers and their packaging.

• E-Prescribing API: Responsible for transmitting prescriptions electronically to pharmacies, this API operates using RXCUI codes. Specifics don’t matter because the pharmacist has the power to substitute and dispense equivalent medication at a similar price point.

The discrepancy between these coding systems necessitated the development of a "translator" within our software. This component maps NDC codes to their corresponding RXCUI codes, ensuring seamless communication between the pricing and e-prescribing functionalities. Leveraging my pharmacy background, I collaborated closely with our development team to design and implement this solution, ensuring accuracy and efficiency.

The Development Process: Collaborating Across Continents

Addressing this coding integration required a concerted effort:

• Early Morning Strategy Sessions: Coordinating with our software development team based in India meant adjusting to significant time zone differences. We held multiple early-morning meetings to discuss the intricacies of the NDC and RXCUI systems, design the translator module, and troubleshoot any issues that arose during implementation.

• Engagement with API Developers: Regular consultations with the developers of the pharmacy APIs were essential. These discussions provided clarity on the specific requirements and constraints of each API, ensuring our solutions were both compliant and effective.

Through persistent collaboration and leveraging diverse expertise, we successfully integrated the two systems, enhancing ChatRx's tech-stack functionality and user experience.

Deciphering Deductible Expenses in Software Development

Understanding which expenses are deductible is vital for effective financial management. Here's a breakdown of my business expenditures and their tax implications:

1. Personal Time and Effort: As the founder and owner of ChatRx, I invested significant personal time—often referred to as "sweat equity." While invaluable to my business start-up’s success, this personal labor doesn't translate into a deductible expense for tax purposes. Incidentally, nor does it produce any income yet since our company is pre-revenue and I have not started paying myself yet.

2. Technical Resources and Tools: Expenses incurred for video conferencing tools, specialized software, and online research subscriptions directly related to the development process are deductible. These tools were essential for facilitating communication and accessing necessary information.

3. Contracted Development Team: Payments made to our software developers in India qualify as deductible expenses. These costs are directly associated with the creation and enhancement of my medical device and telemedicine platform.

4. API Access Fees: Subscriptions or licensing fees paid to access the medication pricing and e-prescribing APIs are deductible. These tech integrations are core components of software as a medical device’s functionality.

5. Overall Software Development Costs: The cumulative expenses involved in developing our Software as a Medical Device (SaMD), slated for market release at the end of March, are deductible. This includes costs related to design, coding, testing,deployment, and paying my executive team members.

Empowering Physicians Through Micro-Business Competency

Navigating the complexities of software development and tax deductions underscores the importance of micro-business competency for physicians. At Physician Entrepreneur Academy: SimpliMD, I am dedicated to empowering physicians to thrive both as healthcare providers and entrepreneurs. To support this mission, I offer several resources that have been formed out of my deep entrepreneur experiences.

• Personalized Micro-Business Consultation: For a limited time, we're offering a personalized consultation for only $99. This session provides tailored guidance to help you establish and grow your micro-corporation. Additionally, this consultation includes a one-year SimpliMD membership, granting you access to $2,500 worth of business products. Schedule your consultation today.

• "Creating A Practice Without Walls" Course: Learn how to build a micro-corporation that provides you with autonomy in the marketplace. This course offers step-by-step guidance to establish a practice that transcends traditional boundaries. Enroll in the course here.

• SimpliMD Business Plan Bundle My comprehensive suite includes a Business Plan Template crafted specifically for self-employed doctors, a Micro-Corporation Budget Template to streamline your financial planning, and a SWOT Analysis Template to optimize your business strategy. Access the Business Plan Suite.

Embarking on entrepreneurial ventures in healthcare requires not only medical expertise but also business acumen. SimpliMD is here to support you every step of the way, ensuring you have the tools and knowledge to succeed.